Paris: The European Union endured a series of political shocks and strains in 2016 that threatened to tear the bloc apart: an ongoing migration crisis; the United Kingdom’s vote in June to exit the union; lacklustre growth and stubbornly high unemployment in the eurozone; terrorist attacks that killed and injured scores; and surging support for populist and anti-EU political parties.
Against this recent history, there can be no doubt that 2017 will be one of the most important and fateful years in the EU’s six-decade history.
There are five acute dangers facing the EU in 2017. These are not isolated challenges. Instead, they are intertwined and mutually reinforcing. Addressing one of them would be a formidable test. That all five are happening simultaneously presents an unparalleled trial for European leaders.
The rise of the far-right
Voters in France, the Netherlands, Germany, and possibly Italy will vote in national elections in 2017. Populist, anti-EU parties are expected to perform strongly in all four contests.
France’s presidential election is likely to pit former prime minister François Fillon and nominee of the centre-right Republicans against Marine Le Pen, leader of the far-right National Front, in the second round of voting in May.
Support for the National Front has surged in recent years. In the 2012 presidential election, Le Pen received less than 18% of the vote, failing to make it to the second round runoff. But recent polls show her receiving as much as 24% of the vote in the first round this year.
While polls suggest that a Le Pen victory is unlikely (current forecasts show Fillon getting 65% of the votes to Le Pen’s 35% in the second round), following a year of electoral surprises — from Brexit to Donald Trump’s triumph in the US presidential election – it would be foolish to write Le Pen off completely.
In the Netherlands, polls show the anti-immigration, anti-EU Party for Freedom in the lead ahead of parliamentary elections in March. Party leader Geert Wilders proposes the closure of mosques in the Netherlands, as well as a Dutch exit from the EU.
In Germany, for the first time since the end of World War II, the far-right could make substantial electoral gains in parliamentary elections, likely to be held in September. The Alternative for Germany party is currently polling around 13%, virtually ensuring that it will clear the 5% threshold and attain representation in Germany’s federal parliament.
German Chancellor Angela Merkel remains popular, and her Christian Democratic Union party leads comfortably in the polls. But her decision to allow more than a million migrants into Germany last year has been attacked from all sides of the political spectrum, and her position could be weakened further if there are additional terror attacks in Germany, following the truck attack on a Berlin Christmas market in December 2016, which killed 12 people.
The Christmas market attack in Berlin showed that Europe remains vulnerable to terrorist violence.
According to Europol, the EU’s law enforcement agency, 151 people died from terrorist attacks in the EU in 2015, and a further 360 were injured. The same year, there were more than 200 failed, foiled, or completed terrorist attacks in EU member states, and more than 1,000 people were arrested on terrorism-related charges.
These trends continued in 2016. Scores have been killed and hundreds more injured in attacks in Belgium, France, and Germany. French police arrested five Islamic State operatives in Strasbourg and Marseilles suspected of planning an “imminent” attack.
Europol estimates that as many as 5,000 Europeans have gone to fight in Syria or Iraq, and hundreds have returned home. Many others across Europe have become radicalised online or by local recruiters. They have formed terrorist cells across the continent, lying dormant but capable of planning, financing, and executing deadly attacks.
As a result, many Europeans fear that terrorist violence in their homelands has become the new normal.
Watch out for Russia
Tensions between the West and Russia are at their highest level since the end of the Cold War. Over the past several years, Russia has emerged as a much more aggressive and unpredictable power, invading and annexing Crimea in 2014 and supporting separatist rebels in eastern Ukraine.
Since 2012, Russia has been rapidly modernising its military, making it a much more formidable threat to European and NATO defence planners. Russia is building and expanding bases in the Arctic, has made big increases to its military budget, conducted several large-scale military exercises that simulate war with NATO, deployed its military in foreign conflicts such as Syria, stationed nuclear weapons in the Kaliningrad region bordering Poland and Lithuania, and upgraded its military equipment. Russian fighter planes also regularly enter or skirt the airspace of NATO countries.
European and NATO military planners worry that Russia might seek to expand its power and influence in the Baltic states. A recent war-gaming exercise from the Rand Corporation showed that Russia could seize one of the Baltic capitals within 60 hours.
Following revelations that Russia had interfered in this year’s US presidential election, signs indicate that it may try to do the same in European elections this year. In an attempt to destabilise or disorient Europe, Russia is pursuing a disinformation and propaganda campaign intended to bolster politicians and political parties sympathetic to Russia and its interests in Eastern Europe.
Russia has also cultivated a number of fringe or extremist political groups across Europe, such as the far-right Jobbik party in Hungary and the National Front in France.
A new migration crisis
Following a controversial agreement reached between the EU and Turkey last March, the number of migrants reaching Europe dropped dramatically in 2016. According to the UN refugee agency, 359,000 migrants and refugees reached Europe in 2016 — down from more than a million in 2015 – with Italy now the top destination.
But the EU deal with Turkey appears on the verge of collapse. EU-Turkish relations have become increasingly strained following July’s failed coup attempt in Turkey, and President Recep Tayyip Erdoğan’s subsequent crackdown on dissent. Following a non-binding vote by the European Parliament in November to suspend EU membership negotiations with Turkey, Erdoğan threatened to cancel the agreement and let the flow of migrants into Europe resume.
The United Nations estimates that 2.8 million refugees are currently in Turkey. An return of migration on the scale of 2015 would put significant stress on Europe’s system of open internal borders, threatening to permanently undo one of the EU’s signature achievements.
A teetering eurozone
For almost a decade now, the eurozone has been in a near-permanent state of crisis. Far from ushering in a period of greater political unity and economic integration in Europe, the euro has introduced new grievances and inequalities among the countries that use it.
Fed up with austerity, tepid economic growth, and an unemployment rate of just below 10% in the eurozone, which is much higher for young workers, many Europeans have become disenchanted with the single currency. Across the 19 countries that use the euro, only 56% of respondents in a recent poll said it was “a good thing” for their country, down five points from last year. Only 41% of Italians polled thought the euro was good for Italy.
The European Commission’s Autumn 2016 economic forecast warned that “uncertainties and vulnerabilities” in the European economy remain “large and widespread”. Greece is in a veritable economic depression. Its economy has shrunk by more than a quarter since 2010 and 23% of its available workforce is unemployed. Italy’s economy is smaller than it was a decade ago, and its national debt stands at more than 130% of GDP.
Italian banks — hobbled by €360 billion of bad loans and a weak national economy — are in desperate need of recapitalisation. Monte dei Paschi di Siena, Italy’s third biggest bank, flunked the European stress test on financial institutions in July, ranking last of the 51 banks tested.
The failed referendum on constitutional reforms in December 2016 presented a further dose of economic and political uncertainty for the eurozone’s third-biggest economy. Italy’s anti-establishment, anti-euro Five Star Movement is currently polling neck-and-neck with the Democratic Party, still led by Matteo Renzi, who resigned as prime minister after the referendum.
Parliamentary elections could be held as early this year. The Five Star Movement advocates a non-binding national referendum to determine whether Italy should abandon the euro.
One country’s exit from the eurozone could set in motion an unravelling of the entire currency area. The political fallout from the economic pain and uncertainty that would result would be immense.
End of an era?
The European project of political and economic integration has been one the greatest achievements in modern history. For decades, it has brought peace and prosperity to a continent shattered by cycles of war, economic turmoil, and political extremism.
But European integration has never proceeded in a linear manner. For much of its history, the EU has stumbled through one crisis after another. As Jean Monnet, one of the founding fathers of European integration, said, “I have always believed that Europe would be built through crises, and that it would be the sum of their solutions.”
But Monnet also said that solutions had to be intelligently proposed and skillfully applied. That is the challenge that confronts European leaders today: can they apply the right solutions to Europe’s present troubles? They must show citizens that the EU can help address the current difficulties, rather than making them worse. Otherwise, the very future of the union may be at risk....